What is the proper adjusting entry at December 31, the end of the fiscal year, b
ID: 2442285 • Letter: W
Question
What is the proper adjusting entry at December 31, the end of the fiscal year, based on supplies account balance before adjustment of $5,200, and supplies inventory on December 31 of $1,200?1) Debit Supplies, $1,200; credit Supplies Expense, $1,200
2) Debit Supplies Expense, $1,200; credit Supplies, $1,200
3) Debit Supplies, $4,000; credit Supplies Expense, $4,000
4) Debit Supplies Expense, $4,000; credit Supplies $4,000
please show sork and answer number 3 is not correct, explain why your answer is the correct one.
Explanation / Answer
the answer is 4th one. Supplies expenses $4000 supplies $4000 Note: Before adjustment the supplies accounts balance is$5200 at the end of the year balance is $1200 so the net balance is treated as expenses($5200-$1200)=$4000